Finance–Growth Nexus in Nepal: An Application of the ARDL Approach in the Presence of Structural Breaks (Record no. 51082)
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| 000 -LEADER | |
|---|---|
| fixed length control field | 03852nam a2200217 4500 |
| 003 - CONTROL NUMBER IDENTIFIER | |
| control field | OSt |
| 005 - DATE AND TIME OF LATEST TRANSACTION | |
| control field | 20190307175622.0 |
| 008 - FIXED-LENGTH DATA ELEMENTS--GENERAL INFORMATION | |
| fixed length control field | 190307b ||||| |||| 00| 0 eng d |
| 100 ## - MAIN ENTRY--PERSONAL NAME | |
| Personal name | Bist, Jagadish Prasad |
| 9 (RLIN) | 30293 |
| 245 ## - TITLE STATEMENT | |
| Title | Finance–Growth Nexus in Nepal: An Application of the ARDL Approach in the Presence of Structural Breaks |
| 300 ## - PHYSICAL DESCRIPTION | |
| Extent | 236-249 p. |
| 520 ## - SUMMARY, ETC. | |
| Summary, etc | A healthy financial system is important for the growth process of an economy. It affects growth by influencing the saving, investment and technological innovations. In fact, researchers argue that low-income countries like Nepal need a much more robust and active financial system when compared to the developed world. Therefore, this study examines the relationship between financial development and economic growth using annual time series data for Nepal during the period 1984–2014. Because Nepal has a bank-based economy, the study used credit issued by banking and financial institutions to the private sector as the proxy for financial development. The economic growth has been measured using real gross domestic product (GDP) growth and real GDP per capita growth (constant 2005 US$). The autoregressive distributed lag (ARDL) bounds testing approach is used to investigate the cointegration among variables in the presence of structural breaks. The study used Zivot and Andrews’ (ZA) unit root test in order to find the structural breaks in the variables. The study finds that the structural change in private credit took place in 2007 when the government of Nepal and Maoists (the then rebels) signed a Comprehensive Peace Agreement and the Maoist rebels joined the interim government, which formally ended the 10 years long civil war in Nepal. Similarly, the study observes break points in real GDP growth and per capita growth in 2001 when the Royal Massacre and a state of emergency took place in Nepal. After allowing for structural breaks, the study finds evidence of a cointegration relationship between financial development and economic growth when economic growth is used as the dependent variable. Thus, it can be argued that the long-run causality is unidirectional from financial development to economic growth in Nepal. The estimates of the ARDL approach suggest that financial development has a significant positive impact on economic growth in both long run and short run. However, the estimates show that gross domestic saving, a control variable, has a negative impact on economic growth in Nepal. It clearly indicates that Nepal has long not been able to utilize the savings in the productive sector. The political instability, poor investment policies and securities and hence the lack of foreign investment and lack of technological innovations could be the causes for Nepal not benefiting from the country’s savings. It is also found that trade openness has a negative relationship with economic growth in the long run: possibly the cause of the persistent trade deficit of Nepal with the rest of the world. However, in the short run, the result shows a positive relationship between trade openness and growth. In fact, it is found that the magnitude of the positive impact of trade openness in the short run is higher than the magnitude of its negative impact in the long run. Thus, the policymakers should give more emphasis on trade and investment policies that could reduce the prolonged trade deficit and help the nation in getting long-term benefits from international trade. |
| 653 ## - INDEX TERM--UNCONTROLLED | |
| Uncontrolled term | ARDL Bounds Test |
| Uncontrolled term | Cointegration |
| Uncontrolled term | Economic Growth |
| Uncontrolled term | Financial Development |
| Uncontrolled term | Structural Breaks |
| 700 ## - ADDED ENTRY--PERSONAL NAME | |
| Personal name | Bista, Nar Bahadur |
| 9 (RLIN) | 33349 |
| 773 0# - HOST ITEM ENTRY | |
| Host Biblionumber | 29959 |
| Host Itemnumber | 74031 |
| Main entry heading | BANDOPADHYAY, TATHAGATA |
| Place, publisher, and date of publication | IIM AHMEDABAD |
| Other item identifier | 5559951 |
| Title | VIKALPA:THE JOURNAL OF DECISION MAKERS |
| International Standard Serial Number | 0256-0909 |
| 942 ## - ADDED ENTRY ELEMENTS (KOHA) | |
| Source of classification or shelving scheme | Dewey Decimal Classification |
| Koha item type | Journal Article |
| Withdrawn status | Lost status | Source of classification or shelving scheme | Damaged status | Not for loan | Home library | Current library | Date acquired | Total Checkouts | Full call number | Barcode | Date last seen | Price effective from |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dewey Decimal Classification | Main Library | Main Library | 07/03/2019 | Vol 43, Issue 4/ 5559951JA5 | 5559951JA5 | 07/03/2019 | 07/03/2019 |